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tv   Squawk Box  CNBC  July 12, 2023 6:00am-9:00am EDT

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federal judge, a biden appointee, ruling in favor of the microsoft/activision merger, looking to pave the way for a closure later this month. and disney may be looking at strategic options by looking at a deal in india. it's wednesday, july 12th, 2023, and "squawk box" begins right now. ♪ good morning and welcome to "squawk box" here on cnbc. we're live at the nasdaq market site in times square i'm melissa lee along with joe kernen becky and andrew are off today let's take a look at the futures as the cpi number is due out in about two hours' tomb. s&p looking to open at 9, dow up by just about 58 we should note markets are moving higher after the dow was up 1%. the s&p was up 0.6
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nasdaq up half a percent in yesterday's session. taking a check on treasury yields, we're focused on the 2s and 10s and continuing to move under. the 10-year at 6.5% and the 2-year at 4.864% the annualized reading to fall from 5.3% to 3.1%. economists are expects a rise of 5% year on year. that's the lowest since november 2021 investors also prepares to hear speeches from many fed speakers today. >> are they still doing that at 8:30 definitely? >> what do you mean? >> releasing something
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different? >> i haven't heard anything different. >> i want to make sure we've been talking about it a lot. >> you want to make sure we fulfill our promise. >> xactly. friday, the s&p was 4398 so we're 4439. so i did some quick math and came up with a calculator. 41 points. we're at plus 41 so they said 100 i could certainly see another whatever it is theoretically. >> theoretically, yeah. >> theoretically they're however many points to get to a hundred. may happen may not. that was an outlier forecast forrer core. if core is 5 again, you can see why the fed feels like they should go. it really matters. >> the thing is the softbank cpi is really baked in.
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>> 2.5 is not baked in. >> right but it hasundershoot at this point, given the expectation >> i agree we're going to talk all about it before it happens. i think it's crazy to make a short-term call. it's not far off his head will get even a little bit bigger god knows what he'll say about bitcoin, but he's good people have been writing in, oh, he's wrong he's one of the full people who was bullish at the beginning of the year, and this week continues to con found even who says earnings are going to be a head wind. the fed's still going, the fed's on -- a recession is on the edge. >> in terms of 60 point for tom
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lease's prediction to come true, the other sort of technical thing that will happen this week is the unveiling of the rebalance. which would require the six biggest stocks to be a smaller rating that would require selling that could be a headwind. >> what if it reaches 99 points? >> i think you give him the win. >> you do? >> for 99? >> okay. >> 98, no, absolutely not. >> i bet you talk about this a lot on your show, activision blizzard. >> not that much. >> not that much >> not that much. >> i'm fascinated. >> why >> because at one point it looked like anti-trust clab
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rates. lina khan has made the point she's going to block every merger that comes down the pike just to see if she can nothing can move in this case we're going to talk about this quite a bit, but here's what's happening. shares of activision blizzard, shares surge more than 10% the recession hitting the highest levels since 201 this is not a maga judge denied the ftc's motion to stop the $69 million deal a spokesman for the ftc said they were disappointed in the outcome given the clear threat it poses to open competition. overseas british regulators are prepared to consider microsoft's proposal to resolve any concerns in the uk after moving to block the acquisition
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in april, suggesting they could come to a conclusion activision blizzard ceo will be on "closing bell" at 3:00. if the eu is okay with it, i don't know what they're thinking. >> they'll probably settle. >> they'll probably settle they said on one they'll keep it on the other they got a 10-year deed to lend himself to call of duty it makes no sense to not have it on different platforms to sell more so lina khan supposedly says it doesn't take both. you have to have the ability to deprief someone of it and have the incentive to want to deprive them to have no incentive or no
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reason to do it. why don't you pick one thing >> he said in testimony he was open to the open consult, open platform where all of these agreements are in place. >> it's cloud based. everybody wants to build that out. it just makes no sense there's the elizabeth warren ideology that all murders are bad. >> this was a huge blow. that i had other smaller losses like meta trying to inquire within you never heard because it's so small. they tried to block that too meta prevailed they ended up inquiring within this is the whale. they missed the one. the other tech companies have got to be thinking we can now take a look at acquisitions finally. >> headline, lina khan wins
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again. she's going to keep doing it almost throw ex-cy meant up against the wall and see if it sticks no one wants that on the wall. disney is look actionet a joint venture or sale. "the wall street journal" reports that talks are in the very early stages. the company has talked to at least one bank about the ways to grow the india business. that would be just one of the many topics when talking to bob iger he'll be on tomorrow morning at 8:00 a.m. during this show i almost said david. >> almost like he's cher.
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>> or madonna. i hope she's okay because she's had some health problems like the kink. >> that's a very modern reference, joe you're with it. >> i'm with it in certain ways drake someone said in my ear. >> at least you acknowledge -- >> i'm getting help now with someone who was born in the last century. i was thinking of something else disney see, all theme park business is down in florida. so you can't say, you go woke, you go broke th that's not what's happening. supposedly you don't need no pass never has that been the case maybe it's we didn't go out for two years and i've got to get to disney world and now all of a
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sudden they would say a lotter the get and where all this. >> and prices start to come down. >> disney is such a bellwether orr what eeps haeple. >> what about the twins and disney princesses? >> they don't know anything about disney princesses? >> coming later or -- >> i don't know how i feel about the princesses >> what about the rides or -- >> they're not tall enough for any rides at this point. i'm looking for every excuse to not have to go and put this trip off as long as i can. >> you can get tickets for the great harry potter -- >> everybody wants to go to universal. >> that's a given. that's a given. all right, arm is purportedly in talks to bring in
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nvidia as an investor. the "financial times" reporting they're willing to talk with soft bang owned arm with the two firms negotiating between pa billion and $40 billion. illumina is set to face a record eu fine for its takeover of grail before it secured approval from regulators there the report adds it could be 10%. coming up, what to watch -- accordingly it's coming, the cpi. >> you keep saying that. >> can i count on it >> yes it's coming. do you want too bet on it? >> no. we're joined with why the fed will raise rate this month
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regardless or if you're going to sayre regardless, you should say disirregardless, right >> you should never say it peer yiep sayre regardless and then you're back to regardless then we're going to talk to roger ferguson for his reaction. you're watching "squawk box" of cnbc where's the unnecessary zippers? that thing! billy, rock star is just how doug feels when he uses workday. thanks, rory. i'll show you rock star! be a finance and hr rock star. workday. for a changing world. billy idol just stole your golf cart! ♪ "the pursuit of gold" by alex ball ♪ ( ♪♪ )
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. you know, we'll get the cpi. these koomg at 8:30. our next guest says regardless -- he actually said regardless -- the fed will hike rates at the next meeting according to him, it proves the feds are driving while looking through the rearview mirror. joining us now is our cnbc contributor. don't we all do that, peter? no one's got a crystal ball? i think the great yogi berra said predictions are hard especially about the future? >> yes yo when you have high rates, it's a sign of monetary tightening. since then if you include the
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rate increases by the fed, 50 basis points, they'll take on another 25 that's 75. if you assume the im% on bank lending is maybe an additional 50, since then to have another 125 basis points of tightening, i think, is aggressive on top of the already rapid rate of rate increases they already conducted last year. so patience right now is something they should take heed to and that doesn't mean they can't raise rates again down the line. if they didn't raise it in the last few weeks, i find it hard to see that they would raise it when they're decelerating.
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>> they needed to look at what was coming back then and were totally unable to see inflation. 've when the pandemic reopening and all that stimulus and everything else and they stayed at zero for all that time, they had no idea that that might have engendered -- to think that ewell of a sudden they're going to have the ability to look ahead instead of backward, i'm not sure the fed fund rate should be tied to what? the cpi or core cpi and tell me how much above cpi should the fed fund rate should be and how much above core should it be and we'll figure out how much we think core and cpi will be because they may already be there. >> which i think they are. historically, i'm talking about free post tech bubble crash when
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greenspan experimented with a 1% fed funds rate, the real rate averaged around 300 basis points right now it's around 200 basis points so we're actually close. that gets to the question. what is the real rate and whether it's on headline inflation or core is the fed going to be comfortable with and right now we're about 200 basis points so we're give or take around there. i think the problem that the fed faces here is that it's one thing to get it there, but to keep it there. you want to keep it for a while so inflation doesn't flare up again like it did in the 1970s so i think net/net, we have to get used to a higher interest rate environmental than roy we've seen and an inflation rate
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that's eventually going to settle out next year at 3 to 4, and if real rates are going to be 200 basis points, i don't see much room downside in terms of the fed fund rate if they want to pivot to an economic downturn. >> the writing is on the wall that we are trending down on inflation rates. so i don't know whether -- you don't need to meet inflation by raising the rates to where -- it's -- we're sort of -- it's converging rates and inflation are kind of converging that would be looking ahead and that's not what they're likely to do, i guess, at this point. >> the risk of overshooting is real, but not having a job is bad. it's not a good way to handle things
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>> the cost of capital for small business, according to yesterday is over 9% right now that's double what we've seen. the cost of capital is at a point where every single day, either your loan is coming due and it's repricing at double the rate you had first taken out that loan or there's some business or project that's not getting done because of that 9-plus percent cost of capital so, yes, the fed doesn't need to do anything from here and we're going to get continued tightening as the days, months, and quarters progress from here because we had 15 years of this and then you go vertical and interest rates that's rate shock therapy that is going to still take time to work its way through the economy. >> and on the supply side, people that argue for those types of remedies, that's helped by business for make and investment that when you raise
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rates, it becomes a headwind peter, thank you. >> thanks, joe. >> bleakly is that really just -- you have a bleak view of the world typically or is there someone names bleakly or what happened >> the founder was named bleakly. >> okay. >> but as a wealth management firm we hope that bond stock prices go higher over time. >> it's a dekem seism, isn't it? >> exactly mr. bleakly thank you, mr. boockvar. >> thank you coming up, professional services company kpmg making a big bet on microsoft we'll talk about the move next "squawk box" will be right back. "you need to fuel the body and you need salt." i would always be the kid not cramping, ready to go. fast forward 20 years and i go from eating salt out of my palm to drinking lmnt.
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the company announced its first partnership with ai. kpmg plans to use the technology for its audit and client services joining us, paul knopp good to have you. >> great to be with you. we're looking at total addressable market we're certainly also looking at the mike grags to the cloud these happening with a lot of companies. many companies will be moving from on premises to cloud in the future, implementing the generative ai into the crowd and looking at the applications that will be developed in the course of the time. as we look at it, we think over
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the course of the next several years we'll generate 10 or 12 additional billion dollars. >> can you walk me through maybe an example of how this is implemented. the generative ai piece of it, that's something new. >> it certainly is so i think this is going to be the biggest technology disruption in decades. from what i hear from ceos it's a very top priority for all ceos and business leaders at this point. one example would be at kpmg, we're working into something called a digital gateway it's o our tax solution for clients where they can help reimagine their tax services in some cases we take over the tax services and provide compliance and other advise services you work the generative ai solutions into the visual gateway and it provide as lot more efficiency and effectiveness and the
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operations the same would be true of any business process in any kind of company or sector. you could work generative ai into sales and marketing almost any business process. to help make or automate certain tasks that are more routine and mundane to offer them the opportunity to do higher work. >> this is a partnership with microsoft. what are you giving to microsoft in return? i'm trying to understand how this is going to be the partnership. >> we expect to invest $2 billion over the next five years with microsoft in both generative ai solutions and in cloud solutions some of the return for us, of course, is incremental revenue that i talked about earlier but we have a 360 relationship with microsoft, so we have a been a partner with wsof 8 since about 2000 we go to market with them. we actually have 2,500 joint
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partnerships with microsoft. we think it ooh going to be an exciting future. >> overall, how's business and the willingness to sign contracts? >> sure. there is certainly more caution in the environment the tightening of credit has certainly had an impact. we see sore decision-making around spending. we see things from bookings to pipeline to revenue more slowly than we did before, say, april. and there's a lack of clarity. i'm interested in the next five years. the next three to nine months will be very rocky. >> recession >> i don't know how to bpredict
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that because we've been talking about recession for 15 months that hasn't come onto the scene yet. i still think it's a possibility, but i also think there's pillars of strength in the u.s. economy it's incredibly resilient. i think it's going to be easy to avoid a recession. nato not giving ukraine a timeline we're going to talk to former admiral general stavridis. it's a big subject "squawk box" will be right back. ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪
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ukraine president volodymyr zelenskyy lashing out after nato fails to offer a national timeline and a clear path for the country to join the alliance, calling the process absurd president biden is set to meet with zelenskyy today to discuss u.s. support for the war-torn nation for more let's bring in former supreme allied commander of nato, admiral stavridis. it's good to have you on
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good to see you as i it always is everyone postures. president zelenskyy knew it's just impossible right now. it's absolutely impossible doesn't nato need to defend a member country to the full extent of what it can do and nobody thinks that ee going to happen given that there's already, you know, a war that's 500 days old occurring there it just wasn't going to happen how can we pick a time line now? >> well, first, joe. nene ganegotiation iter is goin come in high and hard. president zelenskyy comes in with a fine line and he's frustrated there's a sub text here. he's grateful for the assistance
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he's getting you're exactly right the nato treaty says an attack on one member is an attack on all. if nato was to bring them in tomorrow, you're in a war literally with russia. that makes no sense. it's unfolding as quickly as it possible can in terms of of a timeline, i think we're going to have to get to some core rewant war-like armistice, a stop in the halt of the actual fighting. when does that occur that's anybody's guess putin's burn rate is clear how long do we want to contribute to the fund i think the two burn rates are going to drive it to some kind of negotiation probably late
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this year. >> so the united states or the west at this point, you don't think is at war with russia. and i'm just talking about a proxy war. critics say what's happening is we essentially are in a proxy war against russia and that that's a -- it's kind of a frightening place to be. do you think what we're doing is necessary, and how long -- if you're talking an cease-fire, i guess you're going to see what russia has already taken that's going to be theirs and we're going to have to negotiate a settlement that gives them a large part of ukraine, the old ukraine. >> let's wait and see. our job in the west is not to predetermine how that cease-fire, armistice, negotiation turns out. with want to give ukrainians the
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weapons, the tools they need in order to establish the best possible position when that negotiation begins and we have been gradually and inkru mentally adding to the weapons systems from stingers to patriot batteries to tanks we have moved to send cluster bombs, a controversial but correct decision, and we're probably going to see announced f-16s actually transfer. that's our job right now are we in a war with russia? no we are supplying aid, significant aid, military capability to ukraine, but that's different than troops shooting at russians and the reverse. >> i saw something i'm going to see if i can find it.
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it's kind of interesting that democrats are neocons. the left is all in on this, as someone said if they're going to give another $50 billion to ukraine, it's -- i can't remember who said it, but somebody said it are his cries going to become crowder? we've investigate a lot of issues here in this country obviously in terms of debt and everything else. i think if this just drags on another 500 days and it's 1$150 will billion after $150 billion and we don't have any weapons left -- you saw that report. that's overstating it, but we do need to replenish a lot of these things will those cries get lower, admiral? >> joe, i think you're going to see increasing pressuren from the right, and i think from the left and these are legitimate
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questions to ask about billions of dollars being expended. let's do the numbers for a minute europeans have spent about $40 billion as well. together the u.s. and europe, the principal backers, 55% of the world's gdp, we can afford to do this it's far less expensive than what we went through with the forever wars in afghanistan and iraq it's not an afoshltd issue you will see pressure from the right and the left joe, i think the center's going to hold on this. pop quiz, what's the only foreign capital that mitch mcconnell and nancy pelosi have visited last year, that would be kyiv, ukraine. >> you have senator tom cotton who people think are way out there on the right he's one of the most ardent supporters of what we're doing i mean, no one likes to see
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swurch like putin and the atrocities you see there you think about world war ii we've seen this movie before, if you don't do something it's a difficult situation i wish for the ukrainian people and the russian -- all those troops -- it's just bad to watch. nothing good i appreciate your time as always. >> thanks, joe. coming up, are hot summer travel prices starting to cool down and later a crypto legislation bill we'll talk with the createor cynthia lummis in the 8:00 hour. "squawk box" will be right back.
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welcome back to "squawk box. equity futures are higher. we're waiting for the cpi. the s&p 500 is up by almost 8 points, the dow at 36 and nasdaq at 32. without a deal, the deal says it's committed to the negotiate progress says and will explore every opportunity to make a deal but is not confidence the employers have any intention of employing an
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agreement. joining the writers guild of america, they've been on strike for more than two months. >> it kills me to admit i really hope they don't do it. >> why, because you feel like -- >> i don't like that whole -- i don't know i like actors. what they do, they're amazing. have you ever tried to act >> every day, joe. i sit here next to you. >> all right i take back that question. you sit here and talk. no, i tried it at one point. it is hard if you're not trained -- >> people say it looks easy. people think it's easy to be a news anchor. inflation in the travel sector may be showing signs of easing up as stocks in the sector hit new highs and seema mody joins us now with more at 6
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clr6:40 in the morning. i'm sorry, seema. >> no, i love it the average flight will cost $264 that's down 17% versus last summer, that according to hopper while international airfare has risen by 16% year over year. the cost to check into a hotel in miami, san diego, maui have counseler college down analysts say international travel has lead to a price hike in the u.s you have the pricing power for the hotel giants experts say hosts are unable to charge as much as they did in the prior two years due to customers becoming more price cons
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conscious. now, oppenheimer strategists write that they're challenged by more tourists visiting beaches where a high percentage of their inventory is set even cape cod will still cost you over $500 a night to rent a home so there certainly are bright spots across the nation. joe and melissa? >> very good we 're all ready to do what we need to do for viewers thank you. coming up, eu regulators expanding its anti-obesity drugs. ozempic under review after some patients have had suicidal talks. what that means for the surge and success of these drugs that's next. we'll be right back.
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we'll be right back. we'll be right back. taylor hot. overseas, fans in france are reporting issues with accessing ticketmaster's site to purchase seats for the singer's eras tour, leading to an abrupt delay of sales for six upcoming shows. an explanation was not immediately clear. in posts on tick eticketmaster's french twitter site, they said there was a problem with a third party, looking to resolve matters as soon as possible. i'm taking the twins to disney, but are they swifties yet? >> no. >> that's coming >> they listen to blippy's excavator song. >> too young but that's coming.
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girls with taylor swift is like, whoa, like a cultural phenomenon have you been >> no. >> i've been to three. >> have you really they're so expensive >> i'm a swifty dad. >> that's your excuse? you like -- just admit you're a swifty yourself. >> hard core seriously. she's amazing. do you know how many songs she's written that are just unbelievable, lyrics and -- she has some collaborations, but she's, like, a once in a generation talent. >> i've never seen such a crush displayed by you endearing. >> what are you, chopped liver i begged you yesterday to come -- >> here i am i'm not coming back tomorrow >> here you are acting like i've been to a stella adler course because you're doing so well >> all right, several makers of weight loss drugs tumbling after eu regulators will expand its review of drugs to treat obesity and diabetes after reports of
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patients experiencing suicidal thoughts there is a separate study showing that many users of obesity drugs stopped taking them after a year. let's find out that this could mean for the sector. let's bring in healthcare specialist jared holtz good to see you. let's start off with the novo nordisk study. what are -- what are we expecting? we're looking for another set of data, which will reveal whether or not there are cardiovascular benefits to taking this drug a little bit longer term >> yeah, thanks a lot, good morning. this study is really important this is going to show the -- how well the drug is work, versus placebo for patients with a variety -- in a variety of cardiovascular outcomes. so we're going to know over a two-year period how the patients on the drug are doing, versus patients that are not taking anything and hopefully there is a big enough separation, big enough divide in those two
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patient populations that will tell payers, tell insurance companies, listen, there are significant benefits here for patients and we're going to, you know, cover these drugs more fully. right now it seems like most patients that are on them are probably on them as much for vanity reasons as they are for actual therapeutic reasons so this novo nordisk trial could really expand the market significantly if we see a big enough variance between the two patient populations here >> so basically just to underscore this point, this is really crucial for the drug, if it is shown that there are pre found or distinct cardiovascular benefits, that will increase the chances that these very expensive drugs right now will in fact be covered by insurance, therefore opening up the addressable market is that correct? >> that's right. that's exactly right. >> okay. so when are we expecting the results to be out? >> those results should be out in the next month or so. the timing is not perfectly
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clear. but, you know, the latest that i've heard on this is, like, at some point this summer, early fall so fairly soon. >> okay, so, is this in novo's stock at all and how does this other separate study showing patients come off of it in 12 months, does that play into this at all >> i think somewhat in the stock. nov yes and lilly have both been rocketships, especially versus the other peers and large cap pharma i think both stocks, you know, go up to the tune of, you know, potentially 10%, maybe a little bit more if it seems that the drug arm is clearly benefiting, these patients are experiencing cardiovascular episodes at a much lower degree than those not on the drug, that would basically prove that if you start taking these despite potentially what your bmi is, you know, that you're receiving significant health benefits along the way. that's really crucial for insurance companies because they don't want to pay for other therapies, you know, and this would kind of, you know, tell them if you take ozempic or one
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of these other drugs then you're likely going to -- their cost doesn't go up as much. if not, you know, it is going to be tougher these other reports are around getting off in one year, i mean, not that surprising. you know, if you see the weight loss results that you want to over a year, you know, i think the proclivity for most patients would be stop treatment, you know, see how you feel, maybe make some better decisions with respect to lifestyle choices, diet, exercise and then, you know, go back on the drug as needed to me, it is almost like an as needed drug. i'm not really sure how much patients outside of the morbidly obese are going to use this chronically. so i wasn't ultimately that surprised by that. >> do we understand the actual neurological mechanism for this? i've seen ssris and
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antidepressants that have this weird characteristic of causing suicidal thoughts, are there neurotransmitters? there must be if it makes you feel like you don't want to eat by definition there is some brain activity there with neurotransmitters. is that how -- is that what they tie it to? that does sound dangerous to me, just to lose a few pounds. >> i think there is probably some like connection the thing that makes me feel a little bit less concerned on this, i mean i do think we have to continue to monitor it, obviously, but the thing that makes me a little bit less concerned is that these drugs have been used for diabetic patients for many years. and so, you know, moving into the obese -- >> if you do the math on any type of percentage >> yeah. >> what about much less or more cosmetic thing, ozempic face i don't want ozempic face.
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i have enough problems if you look sallow and corpse-like, what? >> that's like my baseline, so i kind of understand that, but, i don't know i think if you're very, very heavy, you got other issues to deal with. i mean, i think, fagain, a lot o this are patients taking the drug are probably more borderline so if they have things on the other side, it is what it is. >> you look great. thank you. tnkou appreciate it. "squawk box" will be right back ♪ ♪ connecting to opportunity is just part of the hustle. ♪ ♪ opportunity is using data to create a competitive advantage.
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good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square, i'm joe kernen with melissa lee andrew and becky are off today we started the show, we had 2 1/2 hours until the cpi. now we have an hour and a half that's the kind of information i can impart without even barely
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thinking about it. u.s. equity futures at this hour adding to gains we saw monday and tuesday. and, but, you would call that wait and see mode, i think and same with treasuries, which, you know, on thursday looked like we were off to the races, over 5 on the 2-year, over 4% on the 10-year, and now both are below the key readings but hot number today and they could be right back there. >> yep as joe mentioned, just a little while, we'll get the latest consumer inflation data for the month of june. the cpi print is forecast to show a rise of 3.1% on the year on year basis. for insights and possible implications of the fed, let's bring in mohammad el-erian, president of queens college at cambridge university good to see you. markets already pricing in a hike at the meeting at the next meeting. so, you know, is this number going to change the fed, the market is giving the fed permission to go again, does it
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go again, does it change anything >> i don't think this number is going to change anything for july the market is not pricing 90% probability that they'll hike and i think that's absolutely right. what is interesting is september. there the market is just above 20%. i think the actual probability is higher than that. and what today's number will influence is the september implied probability of a rate hike >> so how do you think the number is going to come in do you think it will be much softer we had forecasts from tom lee, we have been talking about earlier this week, that the s&p would go up 100 points within the next week implying that the print would be much softer than the already soft print the market is expecting. >> right, so we have entered a nice period for the cpi headline inflation print. i think it will get around 3% today. i think it is going to be well behaved on an annual basis because of the base effects.
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but, me and many, many others are going to be looking not just at core, not just at services, but asking the question can you maintain goods, disinflation, that's what's gotten us down here, particularly energy, while also starting to see services disinflation that is the big question i worry a little bit that people are jumping to the conclusion that goods -- this inflation will immediately translate into services inflation that's not what we're seeing in the rest of the world. so we just got to keep a really close eye on that. >> why would there be a more profound lag between the two in this case? is it just because you're seeing consumer spending on services still? there is still a lot of pent-up demand we transferred our spending from goods to services sort of late -- much later in the game, that's for sure. >> absolutely right. so one is that demand still favors services. two is that the service sector
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is less sensitive to interest rate hikes you need to do a lot more on interest rates to get to the service sector as opposed to the goods sector and then the third is wages. we got to keep an eye on wages we don't want to fall into the trap of the uk where the uk now has become an inflation process where wages are growing by 7% with a private sector growing at 7.7% and that's just a natural reaction to people's purchasing power having been eroded for so long so, keep an eye -- just let's not jump to conclusion we got to keep an open mind. the fed has made many mistakes on inflation last few years. and one of them has been not to look at enough scenarios we have got to keep our mindset open to various scenarios. >> i'm glad you mentioned that uk example that gets at this bigger question and that is what causes wage inflation is wage inflation a response to
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rising inflationary pressures and the need for workers to be able to keep up with the costs of living or is it some -- or is it vice versa? where do you stand on that i think that's key to understanding whether or not the fed feels the need to knock the labor market down more. >> yeah, absolutely right. and it is both you can get to a phase where you are in the uk today, where wages are both -- inflation are both fueled and fueling higher wages. fueling higher wages is easy people are trying to protect their purchasing power they ask for higher wage increases and if they are in the service sector, they have pricing power. fueling is the service providers feeling that they can pass through the higher wages into higher prices and therefore fuel
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inflation as a whole that is where the uk is today. the key issue is it speaks through need for more than just central banks to lower inflation. you've got to act on the supply side if we just simply focus on central banks and simply focus on the demand side, then you have a risk to economic activity unfortunately the debate is all centered right now on central banks and doesn't look at the whole range of tools we can use to have the soft landing we all want >> do you think jackson hole will be a pivotal moment for the fed? i'm looking at it a little bit, but it is coming up faster and faster as the month goes on. do you think they could use that opportunity to reset any sort of expectations beyond this press conference >> i think they're uncomfortable, though they're less uncomfortable than they were a few months ago that the market hasn't believed them in terms of how many rate hikes we're going to get, two more, and where are we going to stay for a while. the market is more dovish than
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the fed has indicated. and the good news is the market has slowly been converted to where the fed is, but the market is not there yet wouldn't surprise me if they try to realign expectations. i think the bigger question and i don't think we'll hear it in jackson hole, but we need to discuss it, is what is the right path to 2% inflation if you get that too fast, with all the problems on the supply side, you will sacrifice a lot of demand. so there needs to be a discussion as to what is the right path, but that's something that the fed doesn't want to discuss right now. >> thank you good to see you. mohammad el-erian. >> thank you. coming up, a u.s. judge giving the thumbs up to microsoft's $69 billion deal to buy call of duty gamemaker activision the court giving the ftc until friday to appeal the decision. more on this story after the break. and new this morning, domino's signing an agreement
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microsoft and activision scoring a victory against ftc chair lina khan, rejecting the bid to block the $69 million merger calling chair khan's ability to continue her crusade against big tech into question, but while microsoft has won the battle, it is unclear if they have won the war the deal faces scrutiny from uk regulators and the ftc could appeal the ruling as early as today joining us now, former department of justice and fcc antitrust official demilo ferris, it is good to see you. do you -- >> good to see you. >> where do you come down, just on the action that lina khan took in the first place? do you think this judge, she was not a -- she was a biden appointee, so the things that she said in terms of why she made this decision makes sense
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to me, you can't use one or the other. you have to have not only the ability to hurt your competitor, but also the incentive she said that there is no incentive for microsoft to do that does that make sense to you? >> yeah, i mean, look, her decision brings out all the hallmarks for why vertical deals, which is what this is, a deal not involving companies that compete today, are a challenge. she talks about that in the case she cites at&t, the at&t challenge saying the agencies haven't won a deal like this, in years. so that part is not hugely surprising in terms of the outcome. what a lot of the commentary had been is the ftc taking advantage and using the opportunity to challenge a deal that might not stand up in court by looking to authorities outside the u.s. and, of course, the uk is still in play as you note. but it points out the challenge of these kinds of deals being blocked in the u.s. courts, even
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while the agencies have made it part of their mission to challenge them >> chair khan obviously has her own point of view on antitrust in general do you understand it is it -- i don't want to be too simplistic, but are mergers just bad in general in your view or just by definition anticompetitive and is that good is that good to cast a pall on the whole deal-making ability? over time, hasn't there been some societal benefits to mergers? are they all bad >> yeah, well, you know, it is hard to be categorical here, some mergers are bad, some are good, that's why you have a system in the u.s. where you go to court and present the evidence i think the agency has been clear about their mission to challenge mergers and their concerns about consolidation one of their oft repeated
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mantras is certain deals should die in the board room. they have been clear about that. they're trying to send that message, put sand in the gears of deals i think one of the challenges with some of the losses is it gets harder to go in front of a board and say your deal has really -- has a lot of issues from an antitrust per spentive, and agencies are going to want to block it. if you're the board looking at the stats and the repeated losses by the agencies, you might say this becomes something we need to -- a deal we understand the agencies are going to challenge it, but the courts seem to disagree. the courts don't seem to think the deals should die in the board room, so we'll take our chances in court and that's what you're going to see happen overtime, which makes an enforcement agenda a little bit tougher. >> we have had some of our guests -- their point of view is probably different jay clayton said he's going to challenge everything and if you lose, you lose. but you just know if you -- as companies you know that they're -- it is going to be challenged, so take that into account before you do it, which
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is its own sort of enforcement action in and of itself. you don't think this is going to change anything, though. i saw in your notes. and the journal, they're going to see things like this, lina khan whiffs again and she's going to keep doing it and it is not going to matter. you don't think this is going to make her be any less actionable in the future on these cases >> so, look, the battle lines have been drawn here there will be people criticizing the chair this morning anded avoluntary the ca aadvocates will say this is the reason why we need to change the laws the court got it wrong, the youth is too con-- judge is too conservative, even a biden appointee. i think there may be deals on a margins that she starts to think and maybe has already thought about whether this is really the one to challenge, but on those priority items she really cares about, i don't think she's going to stop.
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in part, because the mission has not been to win cases in court in fact, if you -- when they criticize prior administrations and those win records, they'll say, well, they weren't bringing the hard cases so, it is hard to see if there will be a hard pivot does it get harder for the agencies yes. they're setting up precedence. there are other opinions that the courts will be citing now. they might start to pause about whether or not they really should be rejecting all of the remedies that companies are offering in order to address competition concerns that is a battle line that the agency has drawn and it is proving to hurt them in court. so here, microsoft is committed to make their game available the court cited that in their opinion as something that really mattered and the agency has been discounting those kinds of commitments. not just under this chair, but for, you know, in recent administrations. >> as a complete novice and i'm not -- i don't even play one on tv, an attorney, but i think of
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tech and the -- i don't feel like prices haven't just continued to come down i don't think anything is that expensive. i don't think i've been harmed by any of these mergers. and i'm wondering whether the european viewpoint that it is not necessarily consumers that are harmed, but employees that might be in the companies that are merging that are harmed. is that an approach that we want to take, that we need to think, i mean, wouldn't there be a lot of buggy whip companies still around if it was all about just keeping jobs and worrying about that instead of worrying about whether you're harming the consumer we don't want to totally turn into the eu model, do we >> well, i think u.s. regulators do have concerns about what is happening with employees and they have just a general view of being concerned about consolidation and that's what you're seeing. so, that's what they're pushing for. the courts are stopping them so whether it is what they want or what we want, it is going to be hard to change the model
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under current law because in the u.s. we have the back stop of the courts. >> yeah. you got one agency worried about jobs and you got the fed which wants to put people out of work. we got to figure out which agency has the -- good to have you on and i think it will be a great resource for us in the future since we're going to keep bringing all the cases >> always a lot of antitrust news these days. >> there is. thanks for coming on. >> thanks. >> see you. >> bye coming up, actors could be joining the picket lines with writers if major studios and the union cannot reach a deal by tonight. we'll talk about what a second strike could mean for hollywood and local economies like los angeles and new york "squawk box" will be right back. time now for today's aflac trivia question. how many professional golfers have won the masters multiple times? the answer when cnbc's "squawk box" continues now there's a e in your defense; look at the size of that- gaaaaaaaaaaaap!!! is that a goat?! you talkin' about me? gaaaaaaaaaaaap!!!
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now the answer to today's aflac trivia question. how many professional golfers have won the masters multiple times? the answer, 17 combined, those 17 mu multi champions have won the
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event 48 times the other 39 champions have each one just once. >> for the first time in 63 years, actors are preparing to join screenwriters on the picket line major studios have until midnight to reach a deal with the screen actors guild when the union's contract is set to expire the ongoing writers strike halted production on 80% of films and tv shows for more than two months a joint strike with the actors union would completely paralyze the silver screen. joining us now for more is cynthia. i'm trying to understand what the points are one seems to be much more quantifiable, the 14% increase that is being requested to union minimums the other one is sort of this unknown and that is whether or not union contracts extend into the streaming world. which is the bigger deal, do you think? >> it definitely the unknowns are what are fueling the strife in hollywood that has just been incredible the last two months
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and looks to by all signs are -- it looks like the s.a.g./aftra, the performers union will join the writers guild on strike. some of it comes down to financial dollars and cents and contract demands and a lot of it is also about very ephemeral things that are nonetheless extremely, extremely urgent to actors just as they are for writers with generative ai it is the phrase that everybody is talking about and in a copy right-based industry where people make their living on their copyrighted works and images, there is a lot of very real concern about ai and not a lot of consensus or understanding on how to draw parameters or any kind of, you know, adjudication of how a major studio or a company would use ai this is one of the very most difficult parts of this negotiation is because nobody
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can at this stage define it and even quite agree where the parameters need to be placed so you have old-fashioned dollars and cents issues and you have very forward-looking future issues and in the context of a pressure-filled negotiation with the clock ticking, it is just no conditions to work out those kind of complex issues and that's why i think we're seeing what we're seeing in the entertainment industry right now. >> we went from the best of times to the worst of times in the blink of an eye. we went from i thought what a great business to be in with streaming. just money everywhere, for everybody, for writers, producers, actors, content, we're all craving. how did that happen? and also i wish everyone could make as much money as they possibly can look at the financial constraints, people like zaslav or warner bros. or any of the companies are under at this point. so it all happened -- it is a
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perfect storm of not being a writer or a -- or an actor's market right now it flipped it flipped suddenly there is cost pressures everywhere do they understand that or do they just say, look, you know, these ceos make all this money, i don't care if they got a lot of debt with their company we want ours and we're going to get it >> that has been -- what you just articulated has definitely been the feeling in the sense of that -- i think there is a basic understanding that hollywood is changing because a lot of the changes, especially in television, there has been a lot going on in the film business, but television, if you just think about the way we consume television has changed so much behind the scenes it created enormous pressures on working hollywood. that, for sure, was not appreciated by me, by a lot -- by people that cover the entertainment industry
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the unintended consequences of the gigantic ramp up in content production that the industry has seen in ten years, it has had so many unintended consequences, you're right for a while the money gusher, one executive called it getting shot in the face by money cannons every day dealing with the effects of streaming, that has -- there is a party's over aspect right now and you got the companies preaching austerity and saying we have to get out of these trenches that we have built, that the industry on some level is still, you know, digging its way out of the pandemic and the challenges there, and it is a -- it is a classic case where the two sides across the table, the gulf is so wide on just the perception of what the parameters of the market will be. >> in terms of the streaming piece of the disputes, cynthia, if the actors get something, you know, along the lines of what
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they want, doesn't that change the economics of both the content maker as well as the streaming platform that buys it because as i understand it, what they're looking to do is to put algorithms to work and figure out how many people are watching or how many times it is streamed and be paid based off of that. if there is continuing streams of a payment that need to be made to actors in the long run over the lifetime of however long it is on the platform, that means it is not as profitable to a netflix and that's going to have to be built in when the production company sells that piece of content to the platform >> absolutely. hollywood studios and streamers now, they are accustomed to dealing with talent contracts and creative contracts in hollywood, they run on three-year cycles, that's pretty short cycle. so the studios are accustomed to going in and renegotiating deals. and the streaming residual, the
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whole notion of residuals is so baked into the contracts that the companies have a sense of these costs coming but what has changed is the need to, in the past these talent deals and creative deals were relatively straightforward you made a television show, it aired once, then it would air again in reruns and a whole system of payments that were absolutely essential and are absolutely essential to the creative community what you have now is you have so many different forms of television, streaming, linear, linear cable, linear broadcast, it becomes -- has become very hard for people to keep up with all of the changes, and the other issue with streaming residuals is as always with the new business, they started very low, and now streaming is not the exception, it is the norm. and you have people saying, you need to raise the streaming residuals significantly, which
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will be a huge increase in the cost structure of streaming and we already have seen companies take effort to literally thin out the inventory that they put on streamers because putting a show on a max or a hulu or any streaming platform, it automatically incurs costs it is not it is just sitting on a shelf, they have costs that are associated with it and you're absolutely right, those costs are about to go up no matter how this is settled, those costs will go up it is just a matter of how far and wide these agreements can be crafted in this very pressure cooker environment for these negotiations >> cynthia, thank you. cynthia littleton, variety coming up, can lvmh take on rolex? robert frank has an inside look at how the company plans to crack into the luxury watch market melissa has an apple watch on every day.
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do you change the band at least? >> once in a while, yeah, of course and then taking on tiktok, senator cynthia lumis joins us to discuss her new bill that could address security concerns without a ban. republicans are waging war on .s.e.c.'s policies. a big deteba on the policy future the two most important things in golf are your swing and your style. dick's sporting goods
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a month of six hearings with votes on various bills focusing on discouraging companies from giving importance to environmental and social goals it is referred -- being referred to as esg month by republicans this week the national association of manufacturers in a letter to the committee slammed recent rules and regulatory changes saying that the s.e.c.'s mandates will dramatically increase costs for manufacturers, and provide minimal benefit for investors. joining us now is hal lambert, point bridge capital founder and ceo. and i got to warn you, hal, brad, man, brad, feels strongly
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about this, brad landers, frequent guest brad just always tells me, how can it be a bad thing for companies just to be reminded or aware of possible long-term risks from whatever it comes from how is that a bad thing? >> well -- >> i did it, i nailed it i got it in a nut shell. all right, go ahead. >> let's start with the first part of the question, reminded that's not really what's happening here ungere der beginslginzler, how n you're emitting from the company. no matter what you are publicly traded company, you have to measure this and report it and by the way, have a third party group verify it. what could possibly go wrong with a third party group coming in to verify your data is accurate and he's claiming this is being demanded by investors.
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but let's look at who he's really talk about. i don't know if people realize this, but 88%, almost 9 out of 10 companies list as their largest shareholder on the s&p 500 either black rock, vanguard or state street. you have really -- we know what is at the top of those companies on the climate side. so this is ultimately going to lead to -- let's get to where this is really headed. he's saying this is for the financial future of the companies. if you can force carbon emissions mandated reporting, guess what you can do next you can tax it that's why this is all headed. we'll go to a tax scheme where you're going to tax companies based on what they're emitting and first thing you have to do to make that happen is make them report on this it is going to increase costs massively and of course that's why companies are pushing back on this. and ultimately that's why congress has to get involved because gary ginzler overstepped. >> now i'm thinking the other way. you had me convinced nothing wrong with a little reminder
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are you just -- it is a death by a thousand cuts. you sucked me in, saying we're going to remind you of these things, are you going to start mandating and taxing these things i got to draw the line there, brad. >> here's what i really understand about what maga republicans in congress are doing is taking away everybody's freedom to invest based on the risks if they see fit. how you reason a fund called the maga etf, which only invests in companies whose managers and employees donate to republicans. now, i got say, that's a bonkers investment strategy. but that's your freedom to invest you can invest based on republican contributions you can only invest in real estate in miami if you want, you can only invest in companies run by january 6th insurrectionists, that's your freedom to invest. my problem is not your maga etf, it is your maga allies in congress taking away the freedom to invest from the teachers and cops and firefighters and school crossing guards who have -- want
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to make sure that they can take long-term risks into account that's the way the capital markets have worked for generations. and to have maga republicans and state legislators and congress trying to take away everybody's freedom to invest, even yours, actually, at least as i read it, if their legislation had not been vetoed by president biden, your maga etf would be illegal why should we take away the freedom of investors to get the information they need from companies. you don't have to read the s.e.c. required disclosures on climate risk, but taking them away and -- just doesn't make any sense to me. it would make your own firm illegal. >> what do you think, hal? >> he keeps talking about freedom. that's what we're looking for, freedom. they want to mandate things. the left isn't happy with just, hey, if you want to report on your carbon emissions, go ahead and report on it i'm perfectly fine with that if a company wants to go through
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that process and do it, go wrrigh ahead. we're talking about mandates he's also talking about esg within the pension plan systems of the far left states, that's what they want to do, they want to mandate that people put money into these esg schemes i would, by the way, i would be perfectly fine with my etf not being allowed to be into a pension plan -- >> what kind of freedom is that? you would be perfectly happy with congress mandating your business out of existence? that's what we're talking about here >> all gary gensler wants is climate disclosure what maga republicans in congress and state legislators want to mandate is that you can't take your climate risks into account and you couldn't even set up a fund like hal has. right now it is maga republicans who are looking to deny the freedom to invest. that's why the congressional hearings are taking place. that's why legislation has been
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passed in red states across the country that -- again, that deny every investor the freedom to look and we're not only talking about climate risk, even though we have the hottest days on the planet in its modern history last year. we're talking about disclosure on things like insider trading we brought a shareholder resolution just to address insider trading at some pharmaceutical companies that would be made illegal by the kind of legislation that house allies are supporting. >> hal, it is -- it has been the hottest days on record which as you know go back to 1979, so, and it is by 1700ths of a degree celsius. we're really good at measuring now to that resolution but -- >> this is not just about -- >> is maga republican a -- that's like one word now >> it is the name a house fund i'm not even against it.
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you can run your maga etf fund until your maga allies take away your right to do so. >> i thought we were called maga extremists or extreme maga >> you change your firm name to that, i'll respectfully call you that instead. >> not necessary to put that modifier in there. we know that about you what do you have to say? >> look, you know, he's conflating things. we're not talking about allowing people to do things or freedom to do things we're talking about mandating. he makes it seem like, hey, what's wrong with a little climate reporting like it is just a little one sentence thing in a report. no, no, no these are mandated measurements that will require millions of dollars of expense and, again, ultimately will lead to taxation of those reporting requirements. and so it is required. this is not like -- >> it does seem like we're, like, with india and china, you want companies to get down to
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the last carbon molecule when they are going gangbusters over there and it is just a drop in the bucket. >> the united states has done very well by having robust reporting in our capital markets. and by having fully transparent capital markets in which publicly traded companies report risks so that investors can make wise decisions >> 10, 20 -- it is so nebulous i don't know if there is risk -- >> it won't be -- you're right it is nebulous now because there is no rule-making clear how everyone is sfupposed to report. if we let everyone do the corporate governance, however they want to report it, if we let everyone have their plans however they wanted to report them, what the s.e.c. does is sets a level playing field where all publicly traded companies report their risks and make their disclosures in the same way and of course no corporate -- the corporate ceo doesn't want a new rule, really. i think what is happening is republicans in congress are look for then corporate ceos rather
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than investors have the invest -- >> it is only half a word. that's only half -- >> you changed the name of your fund, i'll use something else. >> hal, i'll give you -- just listen to the opec secretary-general yesterday. we were at 101 barrels a day now. by 1940 -- or 2040, we'll be at 105. i just don't know -- what kind of world, hal, do you think we're going to be living in if we're pressured to get to some of these mandates that you're talking about? or you're not going to have, you know, jets flying across the ocean bringing goods from china for very long. leo is not going on on a yacht with three other people. that's not happening. >> the problem is, you know, china and india are not going to play this game of the u.s. has gone from -- in the year 2000, the u.s. was about 24% of global emissions. we're now 14%. during the same time india and china have gone to 38% of global
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emissions. so, look, we can play this game all day long in europe and bankrupt ourselves like germany has because they don't have any energy we shouldn't do that because india and china are not going to go along, we're not make a difference in the world this is all just a scheme ultimately for more people, more control out of the administrative state to tax u.s. corporations and redistribute that wealth. let's just get right to it and call it for what it is this isn't about risk 20 years from now and whether a company has emissions too high this is exactly what you said, joe, they're going to start saying, hey, you know, that plane trip you took corporate america, that's too much carbon, we're going to need to tax that, we're going to slow it down and shut down manufacturing in the united states. >> in 1990, billion dollar disasters only took place once every 82 days. now the united states it takes place once every 18 days if you don't -- >> the dollar -- >> if there is freedom to
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invest, you can invest in real estate in miami. >> that's because barack obama now has a couple of houses right on the ocean and -- >> if you want to buy in the funds, they're building those. if you want to buy into funds that are building them, you can. don't deny me the foatn inrmioi need. >> you're going to tax me for building those. >> we got to go. we'll be right back. ever it is, you need cdw and netapp. cdw experts will work with you to understand your needs, then customize a netapp cloud services solution to integrate data management for all your clouds, helping you reduce spend, improve security, control data 24/7 and automatically detect anomalies. in the cloud, at least. netapp makes efficient cloud management possible. cdw makes it powerful.
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while lvmh dominates handbags, jewelry, fashion and other luxury segments, it is still a loser when it comes to watches. i don't like calling someone a loser. >> they're not a loser. >> just not -- >> they're not rolex >> robert frank, you're not a maga -- maga robert frank joins us no, no i'm not going to say that. did you hear that? i didn't know it was an adjective. >> it is everything now. a verb, a purse, a -- >> one of the brands that lvmh owns in watches is tag hauer, opening a new boutique on fifth avenue today and it is more like a shrine than a store see a watch worn by steve mcqueen, that is worth millions of dollars you can find rare pieces you
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can't find in regular stores, all part of the plan to beat the leader in every single luxury calendar the jewelry and watch division growing 11% in the first quarter with nearly $3 billion in sales. frederick arnault, the ceo of tag hauer and the son of bernard, says despite recession fears, the demand remains strong a waiting list of over 18 months for some of its models >> the demand was stronger than what we had projected. that creates the wait list as well so we cannot ramp up that fast of course, if we want to double the next 18 months, we can we will not do that to also ensure that the value maintains itself on the long term. >> arnault told me china is picking up again, among the chinese who are traveling in europe and elsewhere around the world. the company reports its second quarter results at the end of july they are the biggest retailer in the world by market cap. bigger than walmart --
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>> you think it is right with frederick there? 28 years old, is he single do you know? >> he is >> asking for a friend. >> he is if you go online, you can see some very big dating news for frederick arnault as well. >> he's -- >> what is the dating news you can't dangle that out there? >> you have to look it up. he has turned this company around, he launched a lot of new brands they have ryan gosling as an ambassador there is tag hauer watches in the new barbie movie they have the new formula one driver in the world, max verstappen they have really picked the great ambassadors, new models that are very hot right now. so he's done a great job super young. and -- >> yeah, yeah. >> he worked at facebook for a while, mckenzie for a while. he knows tech and knows fashion. >> should invite him to come in on set yeah, do that. so i still do see like rolex ads which are just -- i don't know,
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just still seems like they resonate with -- >> they're classic they define classic. i wouldn't say they're the most innovative brand, but that's not their lane. >> no. melissa has the -- why isn't this totally disruptive to -- they said it would be. >> during the pandemic, it was all these millennial they just blew up the secondary market >> it's about time you can't get an e-mail on it. >> it's about the beauty -- >> what good is a watch other than there's so many other things that in terms of -- it's not form follows function. it's just having a beautiful thing that you can admire the craftsmanship, the materials and, you know, if you look at buying a rolex, you bought a new rolex for, say, $25,000, you can sell it immediately online for 50, $100,000
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even today, there are no watches. there's nothing to buy >> bernard is not the richest guy in the world >> he's fallen to number two >> smallest island in the world. >> and frederick >> there are five of them, five kids >> oh, there are >> they split $200 billion five ways >> crumbs. >> pretty much it's all done >> crumbs. all right, robert. thank you. >> coming upwel lkech , 'lta t and find out where you should be putting your money to work putting your money to work we'll be right ♪ ♪ wherever you go. wherever you stay. all you need is one key. earn and use rewards across expedia, hotels.com, and vrbo.
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sacconaghisacconaghi sacconaghi joining us, johnny sacconaghi tony, great to see you we're heading into earnings seasons, the stocks are up a lot. who do you think has the best setup in. >> good morning, melissa thanks for having me on the show i think the thing about technology that's so striking is you've really had concentrated performance. we look at the first half, tech stocks on a cap weighted basis were up 38%, non-tech stocks were up 6% all of that outperformance was driven by the big six. so those are the microsoft, amazon, google, nvidia, meta and
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apple. and i think the real question is how do you go from here given you've had this tremendous outperformance among these six stocks that have driven the market and i think it's a very tough question because when we look at historical markets where you've had very, very concentrated returns, markets generally do okay in the following six months and 12 months, but the stocks that drove that outperformance typically underperform by a bit. so i think the operative word is really to try and be selective so you really have to have conviction on the names. now, within that coverage universe, i follow apple we have a market weight on apple. historically apple does very well this time of year it outperforms in the june to september time frame, typically the march to september time frame and then it talks a breather when a new cycle comes
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into play. my observation on apple is you can probably ride the stock. but typically after about september 1st, you may want to move more toward the market weight apple is at its most expensive period in the last ten years >> we're seeing a broadening out overall of the markets we just had industrials hit a record high. are you also guiding clients to rotate into some of the names that haven't seen as stellar a performance, particularly when we haven't seen the nasdaq 100 rebalance, which will reduce many impact of the big six that you're talking about >> i think the rebalancing could be a material impact as well we're recommending the clients that they look to the bar bells
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of technology. what's happened is you've had these big six stocks, which aren't hyper growth, per se, other than nvidia, drive the market but you've started to have growth -- you started to have more reasonable valuation and some other higher growth names and value stocks have not performed particularly well. so a couple values stocks that we like within our coverage universe are dell technologies and hewlett packard enterprise both are trading at about ten times earnings hve has a ton of cash, by the beginning of next year they'll have $6 billion in net kcash they have a terrific business -- >> tony. >> i think there's compelling valuation support for hewlett
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packard. for dow, it is not in the s&p index. we think it now qualifies to be in it could be a catalyst along with the pc cycle coming back. >> tony, we got to go, sorry tony sacconaghi, thanks for joining us >> thanks for having us. >> june cpi with the market reaction we'll be right back. this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq,
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constant contact. helping the small stand tall. is anyone ever going to tell the truth... constant contact. about what's happening here. 3... -are we saying there's a chance... 2... -we destroy the world? 1... good morning 29 minute and counting to the june consumer price index. the s&p and nasdaq are less than 1% now from 52-week highs and about 60 points from tom lee's prediction and is this the year d.c. gets crypto regulation done we'll ask one of the closest followers of digital currencies in the senate about her new bill as the final hour of "squawk box" begins right now.
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good morning welcome to "squawk box" here on cnbc we're lcounting down, just abou 28 minutes to go to june cpi s&p 500 looking at 13, the dow up 78, the nasdaq higher by 60 all that can change in a very short amount of time treasury yields at 3.94%, the 2-year well below 5 at 4.823 >> and the top business stories of the day it's subjective. microsoft moving closer to
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sealing its purchase of a video game publisher microsoft and activision aren't in the clear yet a new investigation into the deal may be needed if its terms aren't modified. the federal trade commission can appeal the judge's ruling. don't miss a ruling on "closing bell" this afternoon bobby was in after i guess we had the u.k. news and then the ftc news and he never wavered. it seemed like like he was that no matter what >> the deal was trading at a huge gap for what the offer was for the entire time. it's not like that closed at
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all. >> you can't fight city hall but there are times when it is nice to have courts you know i feel bad for the supreme court when they have 30% approval. we need three separate institutions to keep things straight don't you think is this. >> yes >> we probably shouldn't be undercutting -- >> or denigrating anyone >> exactly stupid move by people. is this still me >> yes >> i was waiting for you to read this you're so euro i'll do it european regulators fining illumina close to $5 million
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people do mention this move as similar to what was going on when kahn, orchestrated this illumina said it will appeal and disney looking for a joint venture for its star india business or selling that unit outright this is according to multiple reports. this and a host of other topics will be on the table tomorrow. i'm going to go with faber's exclusive interview with disney ceo bob iger right here on "squawk box" at 8 a.m. eastern time that will be good to see him rekindle some of the old magic were you around -- >> was i around when the early days in "squawk box"
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when you and he sat on the same set? >> yeah, yeah. >> i watched as a fan. >> we still got a thing, you know >> you and david sure, sure let's get with dom chu you have a thing with dom chu i think. >> i also watched joe and david on that deskacross from each other back on my early days on wall wall street as well. i was a fan back then. let's start off with shares of nvidia, the most valuable semiconductor company. the shares are up not just fractionally "the new york times" is reporting nvidia is in talks to potentially become an anchor investors in the public offering of computer chip designer arm
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holdings last year they did reject the purchase of arm due to anti-trust concerns. and analysts have named the stock a top pick from a tactical perspective heading into the early season also watching shares of draft ku kings around 3.5%, getting help from analysts over at bank of america. they raised the target price to $35. it was 25 before they think the outperformance in that stock, it's already up about 164% from year to date can continue we'll cap things off with a check on jpmorgan chase, which is down fractionally just yesterday we told you about diverse revenue streams. well, this morning analysts at
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citigroup have downgraded them to a neutral rating. it is a valuation call after the stock was a beneficiary of the banking turmoil interest spring. they want to move to the sidelines, melissa i'll send things back over to you. >> thank you joining us, head of technical cal and macro research, a bear company. i want to talk about one of the biggest stocks, alphabet it closed with the biggest moved yesterday since march. how important is that? >> i think it's important the subtle leadership change among us, we see it with alphabet a little softer, amazon a little softer, even apple
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the triple q is losing share or ceding some ground my suspicion is rates are driving us we have yields whohovering arou 4% i suspect these may become bigger stories >> in terms of the rates picture, though, we did cross those key thresholds and we gave them up. what makes you think they move higher >> let's think about the paradox for the moment a year ago today we printed 9 on ci and here we are about to print three. yields are actually higher 600 basis points of headline cpi lower. our big call this year -- pushing up through 385, 390 was
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a very big break we're consolidating but ultimately four and a quarter, 450 is where we like it. when did the energy sector pack last year? it peaked when energy hit nine this market is full of all these great paradoxes and i think yields and energy are yielding in the second half schlumberger, a really important breakout, champion this move to services i think is important. and quietly they've had brent oil down and they can't kill it. brent back above the 50 day i think is important here. >> i don't know whether you
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watch, but jeff curry yesterday tells me things about commodities in general we're going to be using a lot of this stuff for years and years and year and we just don't flip the switch >> i think in this business it's so easy it lose the plot amid the noise. the last two years it really looked like the world was changing with rates, with energy and commodities and then you look at the first six months of 2023 and everything suddenly going back to the old way of tech i'd be careful with that when you look at what's happened the last two years, we have turned a 40-year cycle that is a very meaningful move the leadership implications of this over the next number of years are still to be found out. one of the things i really like here and we talk a lot about this is the industrials. these remind of what tech looked
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like in 2013, 2014 >> coming up, inflation data will be breaking at 8:30 we're watching market reaction next, wyoming senator cynthia lumus. you know what that's from? halloween. and how to prevent another ftx stay tuned you're watching "squawk box.
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republican senators are about to reintroduce their crypto regulation bill that stalled in congress last year. the enough bill add more language and consumer protection and includes feedback from the sec. >> senator senator, it's kind of a dirty word, crypto look what's changed since last
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time, black rock, fidelity why is congress so behind what the private sector is trying to do right now let's go >> let's go is right we need a regulatory framework that integrates crypto assets into our economy in a way that ensure consumer protection so we need to make sure that we have exchanges that are registered with the cftc we need to make sure that illicit finance is addressed, that we have adequate penalties, that we make sure that the assets and reserves behind crypto are sound these are all additional safeguards that we have in this bill it's definitely time to move ahead now that we see so much more integration of digital assets >> it kind of doesn't make sense
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when you think about some of the things that have happened, ftx, for example, or take your pick the foes of crypto that maybe are preventing your bill or similar bills from going through, you would think that their intention is to protect investors and yet the lack of doing anything is actually hurting investors. have they connected the dots to that yet >> well, we're going to have to help them connect the dots because you're absolutely right, that is what's happening when we have companies that are incorporated offshore, not having adequate consumer protections and being able to function as gary gensler likes to call it in the wild west, we're making sure that consumers can get burned and our bill
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would prevent customers from getting burned in the way they could get burned now i'm hoping that people will finally recognize this legislation is not only needed to protect consumers but there are rules it the road for these companies. right now they're being governed by enforcement actions at the sec rather than being told here's what you need to comply with, here's the rules of the road if you're going to integrate digital assets into your economic models and into your business models >> do you -- i mean, do you speak to chair gensler i'm wondering, can he say, well, since we don't have any framework from congress, i'm left with no other alternative than to do this or do you think that his, i don't know what you'd call it, resistance to
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maybe legitimizing -- can he point the finger at congress or is he part of the problem that's preventing congress from doing anything >> well, for a while he was concerned about some of the definitions that we used in the bill but we have adopted some of the sec's recommendations so it's more clear about what is the security, what is the commodity about how to deal with ancillary assets, those that doesn't fit neatly within one of those categories so we create an authority within the bill that includes people both at the sec
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i think both congress in its reticence and the sec in its lack of pro active guidanceto companies are both responsible for some of the erratic regulatory framework that we have now >> we've had the coin base ceo on and there were risk factors when the sec did fine off on the ipo but it still looked like the goalposts were moved or the rug was pulled out from underneath that company and that doesn't help instill confidence in the agency or in the whole sector so i don't know how do this. can we talk about tiktok this bill you've got senators, republicans and democrats, on
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here as well when you hear about banning something, that raises -- no matter who you are, that raises sort of in the private sector it's like do we really want to do that? this would maybe harness things with tiktok but not ban it outright >> correct what we want to do is make sure that the data of users of tiktok is protected from surveillance by the chinese communist party and the way we're doing that is to provide for a registration so there is a wall between people's private data and the opportunity to use it as a mechanism of surveillance >> do you -- can you give me a timeline on a spot, bitcoin etf? when do you think that's going to happen? that might change things
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that might give some cover to whatever's holding up your bills that we try to do again and again, that might give some cover to that, that might happen if there were a spot etf will that be signed off on any time soon? you have big names, black rock, involved >> exactly so you have these companies that a couple years ago were complaining about how bitcoin and digital assets are used, and now they want to incorporate them into their business models. for one thing, i think that's recognition that these assets can be historic value and a means of exchange and they want to add them to their offerings so i hope that it going to come sooner rather than later, the
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futures market, the spot market and the cftc's involvement in integrating bitcoin specifically but other digital assets as well should make for these companies to be able to have these offerings in a way that has adequate consumer protection protects against illicit finance and shows people that these assets are here to stay. >> senator, thank you. and we'll be watching to see how far along we get this time >> thanks, joe >> you're welcome. >> coming up the june cpi inflation report we'll get the data and the instant market reaction and talk with roger ferguson abt ouhow the central bank is likely to view that number you're watching "squawk box" on cnbc
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up next, the number of the morning june cpi, inflation,s i next when "squawk box" comes right back the not-so-secret to our success? earn and keep trust. build and maintain financial strength and stability. deliver solutions that meet complex needs. do right by customers, clients, and policyholders, always. repeat daily for over one hundred and seventy years.
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futures now up 57 points, nasdaq up 55, s&p up 11. take a look at the 10-year,
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which continues. yields are down. that could change so quickly in about 19 seconds we did have pretty good days monday and tuesday, s&p is up -- what do we figure, it's up about 40 points out of tom lee's 100 he was predicting. rick santelli is standing by hey, rick. >> that's absolutely true. we're expecting a headline number to be in the neighborhood of up 0.3. i'm going to be paying most attention to the core, up 0.4. i'll tell you why in a moment as we wait for these numbers to pop lat populate up 0.2%, up 0.2% it's 0.1 later than expectation.
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and it's not the fourth consecutive month of 0.4 and it means it's not the seventh month in a row of 0.4 or higher and that was a record. the last time we had something along those lines was october of '89, april of '90 when it was up nine in a row and going back to february of february of '21 it was only up 0.1. 4% in the rear view mirror is the lowest since march of '21. when you see 3%, you have to go back to march of '21 because that's when the comp drops down to 2.6 and in the rear view
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mirror 4%. if you look at x food energy, that was the lowest since november of '21. we breached 4.8 and that remains at the lowest level since october of '21 when it was 4.6 we could see the interest rates had fallen about three basis points from 393 to 390 and the preopening equities markets have rocketed higher, dow futures up basically 200 and of course we are going to monitor if there's any changes in fed fund futures, i don't think so at 10:00 eastern look at bank of canada to go a quarter point to 5% dollar index prior to this number of course was a the a two-month low. my guess is it's not rallying at this point and we're all going to pay attention to the uaw. wages are a big issue as we learned last friday and uaw and strikes and minimum wages across
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the country, all of those things may be good for many people but there's very little doubt they also fuel wage inflation we need to pay very close attention to that. joe, all yours >> so no change -- bookbar said we're going in march no matter what no change in that probability? >> it's dropped a little bit but we've gone from basically 88, 89% where it's been hovering we lobbed a couple to maybe 86%. i have cheeseburgers bet with steve liesman and i don't think they ought to go but it's very hard for me to think they're going to be dropping that 86% any time soon. they seem to like to make sure the market and federal voting panel are in sync, as they seem to be. i think the real issue is
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september and i think year from september. >> so where should fed funds be? what should we assume about core it's in a downward trend and how much do we add on core to get to the fed funds? where should they be given what we've just heard today, what's the number where they should feel comfortable with where -- if you don't have to -- >> it's a moving target. >> it is, okay but approximately. >> it's a moving target. let's look at where cpi core has been it peaked in what, june of 2022 at 9.1%. it dropped under 7% to 6.5, 6%, 5%, 4% and now 3%. i'm sorry, that wasn't core, that was year over year. if you look at core, that's been
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much stickier. it was 6.6% in last september. that's a high water mark from '82. the final if you remember last february, this february of '23 we went from 5.5 to 5.6 in march. that uptick made the markets nervous, then 5.3 and now 4.8. why did you do all that? i think over a year, over the next 12 months we're going to get it down very close to the fed's target, 2, maybe 2.5% but i don't think it's going to get there in the next several plus months when you asked me where fed fund futures need to be, if they're taking the tact they need to control it immediately and see the drop immediately, they're going to have to two or three more, in my opinion, higher than they are, so another 75 basis point maybe they do 25, maybe they do
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50 but the point is it's coming down and i continue to think we're not going to only see the same type of progress albeit more slowly on the year over year but we're going to see it continue and it's all going to occur higher for longer. i think raphael bostick has expressed those sentiments i just don't think that the central bank believes we're start enough to understand if they take that tact, they're not being aggressive enough in the hearing now and i think that's the issue. >> right, right. all good points, rick. stay with us let's bring in a few more voices to talk about this data. alice, betsy, and we also have our own senior markets commentator mike santoli
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bitcoin, gold, silver, they're all quick moves. this is a number worth paying attention to alison, the fed is going how many more times? >> well, i think it will depend certainly in the next report this was expected to be good, it was. i think there are still reasons to be concerned, particularly that inflation is still high in services and that suggests that this last 200 basis points might be a little stickier and a little bit more entrenched than what the fall might not continue to be as fast and as steady. so i think potentially we might be going another 75 but probably we'll know more in the fat ll fr sure >> professor stevenson, is it going to be uneven from here on? >> let me say, i think another 75 would be a mistake. what we're seeing in this thumb
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number, we got a little stuck on core i think we had seen another month of 0.4, i would have been very worried and be saying something very different we're seeing it come down. that .2 is exactly the number we needed to see the year get down under 5% the thing the fed has to do is it's made a promise to raise rates one more time. they'll have to because they built the expectation into the market then they need to point out how inflation had does have to come down slowly and requires patience the rate increases they've already done are still working through the system that's why we're seeing the number we're seeing today and they're going to have to, you know, give it time to continue to work through the system look at the jobs report we saw last week. we see a labor market that is slowing -- not crashing but slowing. we see inflation that is
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slowing. this is exactly what a soft landing looks like >> wow mike santoli, on the 10-year and 2-year, are we now where we were last wednesday before the adp report looked like yields were finally getting to believe the fed now we're back below -- now they're challenging the fed again. >> i think they're believing the fed in terms of the next hundred feet of road right ahead of us, the july meeting, i think that's pretty well priced at this point. the fed has been trying to seassend a message, powell has, just time to do some of the work for it. one of the reasons stocks have been able to do well this year, the equation has been is inflation going to come down faster than the economy deteriorates that's been the case inflation has been more benign
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than the concerns about growth have taken hold. when you're talking about a meeting in a couple of weeks for the fed and then nothing in august, you have a september meeting that's very much open. i think you're seeing the markets say a better chance that the fed is just about done by the way, the fed hasn't been the main story for a while the market has been acting as if inflation was mostly a 2022 problem. we're one year past that peak stag inflation panic and i think we been essentially making our peace with the current yield levels who knows if that continues. i do think the market took a fair bit of credit for a pretty good inflation print today before we got it there was a lot of confidence building there was going to be a down side surprise the question was whether we could exist. >> we questioned whether or not they can run and we're seeing in reaction at least some fairly
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big gains, particularly among the higher multiple stocks like an nvidia and a tesla. >> for sure. the tight connection we saw last year, though, between mega cap tech and the direction of yields has been broken this year. yields has been confidence and profit margin, defensibility, it's been about a.i. and about just buying the big, obvious stocks that have great franchises what's most significant about the recent marked is it has broadened out a fair bit 40% of all s&p stocks are up 10% year to date it's not just been seven stocks. and industrials and consumer sickly calls and transports have been outperforming credit looks okay. in order the market is betting we have something like a period where a soft landing cease plausible, whether we ultimately get that or not.
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>> aliclison, i get this all th time can it be this easy? can the fed really nail it after ten years of zero and all kind of mistakes according to some people can they orchestrate this and stick the landing? can that happen? >> i could i guess i'm just superstitious i have been pro soft landing until last week and now that everyone expects it makes me think it won't happen because we jinxed it. let's just wait and see what happens to wages and the parts of inflation that are a little harder to vanquish before we declare victory. >> same question, betsy. >> you know, i think they can. i think they've been showing that they can. you've seen the fed vacillate between early in the pandemic. what they really cared about was the labor mash and let inflation get a little out of control and now they really pulled the hammer down on inflation i think they're getting the mix
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right and it's going to take a little bit of time nobody wants to see inflation come crashing down overnight we want to see a nice, steady decrease as long as we continue to see that, i think the fed's in good shape. we're already in an inflation chang where things are getting better for families. food didn't increase at all last month and that's really important for of day people that the price of their need isn't going up >> just quickly, rick, if they go another 25, is that overshooting or is it close enough for government work will you be happy with that? will you be satisfied? >> oh, yeah, i think it's close enough for government work, joe. if you asked me if 3m is soft landing, i'd say i think it's going to be great. the biggest probably we're going to have is going to be commercial real estate there's your hard landing.
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it's going to take years before we really know that fact >> and nobody coming back to worked and everything else commercial real estate is challenging. thanks for a lot of reasons. talking about how tough hollywood is i hadn't even figured in a.i. for these poor writers good god >> did you ever imagine what somebody would do with your likeness if they own the likeness and footage of you, they own the content they create. >> and did not disappoint, big moves in a lot of -- >> big moves coming up, former fed vice chairman roger ferguson will help us understand what the new cpi numbers mean "squawk box" will be right back. and businesses need to navigate the changing landscape to stay ahead. when you partner with barclays, every change leads
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welcome back to "squawk box. june cpi coming in cool but it's not a surprise it was pretty well telegraphed by a lot of people, wasn't it? >> it was still cooler >> it was. we are not at our best levels on the dow and the nasdaq, as you pointed out. we're not going up another hundred basis points that's what moves the tech stocks, right? >> it helps. it helps if rates are contained
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below 4% >> they can deal with that number we had 8% for years and years and tech stocks did great, remember >> yeah, but there's a whole general generation of people who don't remember that. >> this generation is nuts >> let's talk what the cpi report could mean. joining us is roger ferguson, former vice president of the federal reserve and cnbc contributor. roger, it's always good to see you. the markets are giving the fed a pre free pass for '25. does this change anything? >> certainly i think the market is right, it has been well telegraphed and i don't think this chases anything it puts into question a bit more more the september meeting, which is live. there will be a great deal of data and we'll hear more the market is right, 25 upcoming
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and september, it's wait and see. i wouldn't take it off the table at all because of this one report >> do you think given the rise that we've seen in stocks in general, in tech stocks particularly on the larger mega cap stocks, some of the speculative names? do you think that concerns the fed, that that factors in that what they do is not working to dampen asset prices in this arena? >> i don't think they're focused on a specific sector so the tech stock being up i don't think is something that comes across at the fomc table they do talk about something called the weather effect and financial conditions and so continuing strength in the equity markets sort of come into play because it creates forward momentum for consumers and investors and in some small way loosens what's called financial conditions i don't think they're fundamentally targeting equity
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markets at all they're looking at inflation numbers and trying to understand what's driving that and some of that is very much more about wages, which i think are much more focused on than the valuations in equity markets right now. >> at least the initial market reaction indicates that markets for now are pleased, markets dit markets for now are pleased, that the fed may be at bay, and september may not be as live, maybe even november. do you think that's the right takeaway maybe they actually stuck the landing? maybe that's an increasing possibility that there is that soft landing >> look, i think there's an increasing possibility that soft landing, which is a very positive thing fortunately, we still see forward momentum in many sectors. however, i think it's really too early to declare that as a done deal, because, as the fed itself has said, much of the work that they have done has not yet shown up in markets, so we haven't actually seen the full impact of the increases in interest rates
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thus far, and there are some sectors that are weak, that historically have spilled over into the broad economy, so think about the real estate sector and the final point to note here is, you know, if we are fortunate enough to have a soft landing, it would be, i think, the second or third out of 11 or 12 attempts the fed has had to do that, so too early to say soft landing certain positive news, soft landing possibilities have increased >> if you're still on the fed and you wereentitled to a dot, i'm just wondering where you would stand in terms of how you see the rate hike trajectory, given this latest piece of data and what you are seeing yourself in the economy >> so, what i'm seeing in the economy is really very mixed with some sectors that are more interest sensitive and struggling a bit more than others i would -- i think i would, based on this number, recognize
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that september really would be a time to take a close look, wouldn't take the 25 basis points off the table at all just yet based on one number, because -- and we've heard president daley mention this the other day. i think they are now in what they would describe as a risk management approach. i still believe the vast majority at the risk of stopping the hikes too early is greater than the risk of continuing and going maybe one too many and so i think that's why september is very much on the table, and we should not, in any sense, think they are done at this stage i think at least september is a real possibility >> roger, thank you. nice to see you, roger ferguson. coming up, what to watch ahead of the opening bell on wall street and following the new cpi report futures hanging on to gains, although off the best levels nasdaq looking to add 140. stay tuned, you're watching "squawk box" on cnbc n ♪
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so many things off the highs, but definitely a trend. things improved since that soft number, cool number, the cpi data joining us now, stephanie link, chief investment strategist at
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hightower and a cnbc contributor. kind of well telegraphed, maybe, that this was out there, steph, but still, some interesting moves in other markets like gold or the dollar index, so it wasn't totally in the markets. >> well, yeah, i mean, it was expected to be a soft number, and it was a soft number we're certainly making progress on inflation, and at the same time, joe, the economy is holding up, especially on the consumer side of things, which is 70% of the economy, of gdp. especially when you look at housing and auto and services, so that's good that's good news, right? it is a soft landing like you've been talking about for the last half hour. we'll see, because we still have to wait on data coming up. i mean, there is this lag effect that we have been talking about in terms of all the fed hikes and what that's going to mean to the economy down the road, but for now, it is soft landing. the atlanta fed gdp now is at 2.3%, and i think all of this is going to translate into a little bit better on the earnings side
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of things and this broadening that we have seen in the marketplace is much more healthy than what we had seen in the first half of the year >> but why fight it? why not buy the magnificent seven if we're almost done raising rates? i mean, they're great companies, great growth, and there's momentum >> yeah, i think you certainly can own some of them, but i think the valuations are not exactly cheap, and they're not exactly undiscovered, so i'm looking for other parts of the market where there really is value out there and where i think the expectations are really low >> okay, so, what would you be dabbling in today? >> yeah, so, i mean, this one is really ugly. it's 3m. you know you guys have talked about the industrials and how they've actually done quite well well, 3m has not done that well. it's down 15% on the year and trades at 12 times earnings so there are zero buys on this stock from the sell-side, and that is very interesting to me
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and i am sure that investors on the buy side certainly don't own it as well but look, they had -- they were making progress on the water contamination settlements. that was good news, and it was more comprehensive we have to get through the ear plugs issue too and settlements there. however, i think that once you start doing settlements, history suggests that the stock starts to rebound they have a restructuring and a spin of their healthcare business later this year, so i think that's positive, and i think, again, kind of off the radar screen >> do you have a couple more we have some time. >> yes, we have american express is one that trades at 12 times forward estimates. their long-term growth rate for earnings is 15%. total revenues of 10%, and i like their mix
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their mix is 80% of their revenues are fee-based, and 20% is net interest income i don't really want to have exposure that much to net interest income because we know it's going to be weak this quarter, given where the yield curve is at. so, i like the mix i like their size and scale, especially with the affluent consumer and small, medium-size businesses and the return to travel and the return to business travel. so, i like this one. it's up 18% on the year, but i do still like it, and i think the valuation makes a lot of sense. >> all right i want to do one thing before we go and leave today, so that's going to be it, steph, but thanks for the quick analysis. 3m and american express. we will -- >> thanks, joe >> maybe that's going to appear on "fast money" later. >> at 5:00 >> at 5:00 >> perhaps >> eastern time. another reminder, don't miss an exclusive interview with disney's ceo, bob iger, tomorrow at 8:00 a.m. eastern time right
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here on "squawk box" from alan and company sun valley media conference conducted by peabody award-winning journalist david faber. how's that, david? he asked me to -- no, he didn't. >> see you friday. >> kelly tomorrow. make sure you -- she only has one name "squawk on the street" is next ♪ good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer at the new york stock exchange david faber is on assignment, heading to sun valley as joe says, where he'll have an exclusive with iger tomorrow at 8:00 a.m. eastern time meantime, the bulls get their wish as june cpi comes in cool lowest monthly core in more than two years. yields are dropping, two-year near

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